[EXECUTION VERSION]
SECOND COLLATERAL CALL EXTENSION LETTER
Dated as of September 13, 2002
To: Each of the banks, financial institutions
and other institutional lenders party
to each of the credit facilities referred to
in paragraphs (b) through (g) below,
in each case in their capacity as lender
and, to the extent applicable, agent
for the lenders party thereto
Ladies and Gentlemen:
Reference is made to:
(a) The Collateral Call Extension Letter, dated as of August
19, 2002, by and among the NRG Collateral Parties (as defined below) and the
Collective Lender Group (as defined below) (such Letter, as further amended,
supplemented or otherwise modified from time to time, being referred to as the
"INITIAL COLLATERAL CALL EXTENSION LETTER");
(b) The Credit Agreement, dated as of May 8, 2001, by and
among NRG Finance Company I LLC, Credit Suisse First Boston, acting through its
New York Branch ("CSFB NY"), as Lead Arranger, Sole Book Runner, Administrative
Agent and Documentation Agent, Westdeutsche Landesbank Girozentrale, New York
Branch, as Arranger and Co-Administrative Agent, CIBC Inc. and TD Securities
(USA) Inc., as Arrangers and Co-Syndication Agents, INTESABCI S.p.A., New York
Branch and Kreditanstalt fur Wiederaufbau, as Arrangers and Co-Documentation
Agents, ABN AMRO Bank N.V., Bank of America, N.A., Bayerische Hypo-Und
Vereinsbank AG, New York Branch, BNP Paribas, Citicorp USA, Inc., Deutsche Bank
Xxxx. Xxxxx, Fortis Capital Corp., The Royal Bank of Scotland PLC and The Bank
of Tokyo-Mitsubishi, Ltd., New York Branch, as Arrangers, and the financial
institutions party thereto from time to time as lenders (such Credit Agreement,
as amended, supplemented or otherwise modified from time to time, being referred
to herein as the "XXXXX CREDIT AGREEMENT");
(c) The Credit Agreement, dated as of November 28, 2001, among
NRG XxXxxxx LLC, as Borrower, Westdeutsche Landesbank Girozentrale, New York
Branch, as Agent and Collateral Agent, and the other financial institutions
party thereto from time to time as lenders (such Credit Agreement, as amended,
supplemented or otherwise modified from time to time, being referred to herein
as the "NRG XXXXXXX CREDIT AGREEMENT");
(d) The Loan Agreement, dated as of November 13, 2000, among
NRG MidAtlantic Generating LLC, as Borrower, the Lenders party thereto and
JPMorgan Chase Bank, as Administrative Agent (such Loan Agreement, as amended,
supplemented or otherwise
modified from time to time, being referred to herein as the "NRG MIDATLANTIC
LOAN AGREEMENT");
(e) The Credit Agreement, dated as of June 25, 2001, among
Brazos Valley Energy LP, a Delaware limited partnership, Brazos Valley
Technology LP, a Delaware limited partnership, the lenders party thereto from
time to time and ABN AMRO Bank N.V., as Agent and Collateral Agent, as amended
by the First Amendment dated August 8, 2001 and the Second Amendment dated July
18, 2002 (such Credit Agreement, as further amended, supplemented or otherwise
modified from time to time, being referred to herein as the "BRAZOS VALLEY
CREDIT AGREEMENT");
(f) The Facility Agreement between Sterling Luxembourg (No. 3)
s.a.r.1. as borrower and guarantor, Killingholme Generation Limited as
guarantor, Killingholme Power Limited as borrower and guarantor, Banc of America
Securities Limited as arranger, facility agent and security trustee, Bank of
America, N.A. as account bank and technical bank and the banks and financial
institutions set forth therein (the "KILLINGHOLME LENDERS"), dated March 29,
2000, as amended and restated on June 5, 2000, further amended on June 30, 2000,
August 11, 2000, April 17, 2001 and June 19, 2001 and as further amended and
restated on September 5, 2001 (such Facility Agreement, as further amended,
supplemented or otherwise modified from time to time, being referred to herein
as the "KILLINGHOLME FACILITY AGREEMENT"); and
(g) The Framework Dual Facility Agreement, dated as of October
9, 2001, between ING Bank N.V., acting through its Prague branch (ING Bank N.V.,
organiza*ni slozka), and Entrade GmbH, as amended by the Amendment Letter No. 1
dated January 17, 2002 (such Dual Facility Agreement, as amended, supplemented
or otherwise modified from time to time, being referred to herein as the "ING
ENTRADE FACILITY AGREEMENT", and together with the XxxXx Credit Agreement, the
NRG XxXxxxx Credit Agreement, the NRG Midatlantic Loan Agreement, the Brazos
Valley Credit Agreement and the Killingholme Facility Agreement being the
"PRIMARY AGREEMENTS", and together with any and all security agreements, equity
undertaking agreements, guarantees, or other similar agreements and undertakings
entered into in connection therewith, being referred to herein as the
"AGREEMENTS"; each of the banks, financial institutions or other institutional
lenders party to any of the Agreements as a lender, hedge counterparty, issuer
of letters of credit or in a similar capacity with respect to the extension of
credit on behalf of any NRG Party (as defined below), being a "LENDER"; and each
of the agents, arrangers or other representatives for the Lenders under the
Agreements, being referred to herein as the "AGENTS", and together with the
Lenders, the "COLLECTIVE LENDER GROUP").
The Agreements contain certain provisions wherein NRG Energy
Inc., a corporation organized and existing under the laws of the State of
Delaware (("NRG ENERGY") (and a wholly-owned Subsidiary (as defined below) of
Xcel Energy, Inc. ("XCEL ENERGY")) or certain of NRG Energy's Subsidiaries (NRG
Energy and each such Subsidiary, being an "NRG COLLATERAL PARTY" and
collectively, THE "NRG COLLATERAL PARTIES") is required to post cash collateral,
letters of credit or other similar credit support or make certain equity
contributions, or is permitted to cure any Event of Default (as defined below)
by doing the same, as a result of a decline in the credit rating of NRG Energy
below certain specified levels (collectively, such requirements, being
hereinafter referred to as the "COLLATERAL CALLS"). NRG Energy and each of NRG
Energy's Subsidiaries are currently contemplating a comprehensive restructuring
of the
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assets and liabilities of NRG Energy and its Subsidiaries (THE "PROPOSED
RESTRUCTURING") and in order to provide sufficient time to prepare a
restructuring plan in connection therewith, the parties hereto entered into the
Initial Collateral Call Extension Letter that: (a) postponed the dates as of
which any NRG Collateral Party is required to comply with its obligations in
respect of, and (b) waived any Event of Default arising under any of the
Agreements as a result of (A) any NRG Collateral Party's failure to timely
satisfy any Collateral Call or (B) the decline in the credit rating of NRG
Energy referred to above and the right to take any remedial action in connection
with (x) the failure of such NRG Collateral Party to comply with any such
Collateral Call under any of the Agreements, or (y) the decline in the credit
rating of NRG Energy referred to above, in each case, until September 13, 2002
(such requested postponement and/or waiver referred to in clauses (a) and (b)
being referred to herein as the "INITIAL COLLATERAL EXTENSION"). In addition,
the Killingholme Lenders waived any Event of Default occurring pursuant to
Clauses 481(o) and 48.1 (v) of the Killingholme Facility Agreement, in each
case, until September 13, 2002 (such waiver being referred to herein as the
"INITIAL KILLINGHOLME WAIVER").
In connection with the Proposed Restructuring, NRG Energy and
each of NRG Energy's Subsidiaries need additional time to prepare a
restructuring plan. Accordingly, NRG Energy hereby requests that the Collective
Lender Group: (a) (i) further postpone the dates as of which any NRG Collateral
Party is required to comply with its obligations in respect of, and (ii) further
waive any Event of Default arising out of the decline in the credit rating of
NRG Energy referred to above entitling the relevant Lenders to make, the
Collateral Calls, in each case, to the Waiver Termination Date (as defined
below); and (b) further waive (i) any Event of Default arising under any of the
Agreements as a result of (A) any NRG Collateral Party's failure to timely
satisfy any Collateral Call or (B) the decline in the credit rating of NRG
Energy referred to above and (ii) the right to take any remedial action in
connection with (x) the failure of such NRG Collateral Party to comply with any
such Collateral Call under any of the Agreements, or (y) the decline in the
credit rating of NRG Energy referred to above, in each case, until the Waiver
Termination Date; provided, that none of the foregoing shall limit or affect any
right, or the exercise of any remedy, arising out of any such Event of Default,
such failure or such decline to the extent that such right or remedy is with
respect to a Project Subsidiary or Exempted Project and not NRG Energy itself or
any of its other Subsidiaries (such requested postponement and/or waiver
referred to in clauses (a) and (b) being referred to herein as the "SECOND
COLLATERAL EXTENSION").
NRG Energy hereby requests that the Killingholme Lenders waive
any Event of Default occurring pursuant to Clauses 48.1(o) and 48.1(v) of the
Killingholme Facility Agreement, in each case, until the Waiver Termination Date
(such requested waiver being referred to herein as the "SECOND KILLINGHOLME
WAIVER").
In addition, NRG Energy hereby requests that the Collective
Lender Group not take any action to enforce the terms of the Xcel Support
Agreement (as defined below).
1. Extension, etc. (a) Subject to the satisfaction of the
conditions precedent set forth in paragraph 2 hereof and the other terms and
conditions set forth herein, each of the undersigned Agents, on behalf of the
Lenders it represents under each of the Primary Agreements specified by its
signature below (each such Agent being a "SIGNING AGENT") hereby consents, on
behalf of such Lenders, to the Second Collateral Extension. In addition, Banc of
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America Securities Limited, in its capacity as Facility Agent for the
Killingholme Lenders (in such capacity, the "KILLINGHOLME AGENT"), hereby
consents to the Second Killingholme Waiver. This letter is hereinafter referred
to as this "SECOND COLLATERAL CALL EXTENSION LETTER"; capitalized terms used
herein and not otherwise defined herein have the meanings specified therefor in
Schedule A hereto.
(b) On the Waiver Termination Date, without any further action
by any Lender, Agent or the Collective Lender Group, all of the terms and
provisions set forth in the Agreements with respect to Collateral Calls and any
Event of Default or other remedial right provided for in connection with the
failure of any NRG Collateral Party to comply with its obligations in respect of
such Collateral Call shall have the same force and effect as if this Second
Collateral Call Extension Letter had not been entered into by the parties
hereto, and each Agent and Lender shall have all of the rights and remedies
afforded to them under any Agreement to which it is a party or entitled to the
benefits thereof with respect to any failure by any NRG Collateral Party to
comply with any Collateral Call contained therein if such Collateral Call is not
complied with or further extended or waived on or before such date.
(c) Nothing in this Second Collateral Call Extension Letter
shall constitute a waiver of, or an agreement to forebear in the exercise of any
remedy available as a result of, any other Event of Default not specifically
referred to in paragraph l(a) above, including any Event of Default arising out
of any failure by any party obligated thereon to make any payment when due of
any payment of principal or interest on any Debt outstanding under any of the
Agreements, including any such failure that may be anticipated on the date
hereof.
(d) Subject to the satisfaction of the condition precedent
that Xcel Energy execute and deliver the Xcel Acknowledgement (as defined below)
and the other conditions precedent set forth in paragraph 2 hereof and the other
terms and conditions set forth herein, each Signing Agent and the Killingholme
Agent hereby agrees, on behalf of the Lenders it represents, to not take any
action to enforce the terms of the Xcel Support Agreement (as defined below)
during the term of this Second Collateral Call Extension Letter, except to the
extent not taking such action would reasonably be expected to adversely affect
the rights or remedies of NRG Energy or the Lenders under the Xcel Support
Agreement. The Lenders acknowledge that the execution and delivery of the Xcel
Acknowledgement constitutes a material inducement to the Lenders to grant the
waivers and extension provided for herein and to agree to this paragraph l(d)
and in the absence of such execution and delivery would request NRG Energy to
exercise its rights under the Xcel Support Agreement, including by making a
demand as provided for therein to enforce NRG Energy's rights under the Xcel
Support Agreement.
2 . Conditions Precedent. This Second Collateral Call
Extension Letter shall become effective as of the date first above written when
and only when, on or before October 11, 2002, the following conditions shall
have been satisfied:
(a) NRG Energy and each of its Subsidiaries indicated on the
signature pages hereto (each such Person being referred to herein as a
"NRG PARTY") shall have executed and delivered to each of the Signing
Agents a copy of this Second Collateral Call Extension Letter;
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(b) Each of the Signing Agents shall have executed and
delivered to NRG Energy a copy of this Second Collateral Call Extension
Letter on behalf of Lenders representing at least the Required
Percentage under the relevant Primary Agreement required to consent to
the Collateral Extension under the terms of such Primary Agreement, and
Bane of America Securities Limited, as Killingholme Facility Agent,
shall have executed and delivered to NRG Energy a copy of this Second
Collateral Call Extension Letter on behalf of Killingholme Lenders
representing at least the Required Percentage of the Killingholme
Lenders under the terms of the Killingholme Facility Agreement.
(c) NRG Energy shall have delivered to each of the Agents the
following financial and other information (which shall in the cases of
clauses (i), (ii), (iii), (iv), (v) and (vi) be accompanied by a
certificate of the chief financial officer or treasurer of NRG Energy
to substantially the effect contemplated by paragraph 3(h)):
(i) a 13-week forecast of cash flow and expenditures
for NRG Energy and its Subsidiaries for the period commencing
with the week of September 2, 2002 (the "CASH FORECAST"),
which shall reflect the reasonable estimates by NRG Energy of
opening cash balances, operating cash receipts and asset sale
and other cash receipts and capital, operating and other
expenditures on an as received and as made basis. The Cash
Forecast shall include separate forecasts on a consolidating
and consolidated basis in a form reasonably acceptable to FTI
Xxxxxxxx & Xxxxx, LLC. Schedules to the Cash Forecast shall
include a specific schedule of anticipated payments to
Affiliates of NRG Energy and a listing of payments of
principal of and interest on the Debt of NRG Energy and its
Subsidiaries due during such period (including the dates when
due and any applicable grace periods and whether or not such
payments are anticipated to be made) and of payments in
respect of turbine orders by them due during such period
(including whether or not such payments are anticipated to be
made);
(ii) a schedule of all material assets of NRG Energy
and its Subsidiaries that are not subject to any material
Liens and any recent material indications of the values
thereof;
(iii) a listing of all material agreements or
instruments that prohibit or limit the ability of NRG Energy
or any of its Subsidiaries to create, incur, assume or suffer
to exist any Lien upon any of the assets set forth in the
previous clause (ii);
(iv) to the extent not previously delivered pursuant
to the Initial Collateral Call Extension Letter, a list, and
copies, of all tax sharing agreements and arrangements, Debt
Instruments, Capital Expenditure Agreements, Lease Agreements
or Other Material Agreements (or any agreements or documents
relating thereto or entered into or delivered in connection
therewith) to which NRG Energy or any of its Subsidiaries are
a party which require (A) that NRG Energy or such Subsidiary
post cash collateral, letters of credit or other similar
credit support or make certain equity contributions as a
result of a decline in the credit rating of NRG Energy or the
occurrence of any other similar credit event or
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(B) provide that NRG Energy or any of its Subsidiaries may
cure any Event of Default resulting therefrom or thereunder by
doing the same;
(v) a listing as of July 31, 2002 of all outstanding
loans and open advances made by Xcel Energy, NRG Energy or any
of their Subsidiaries to NRG Energy, any of its Subsidiaries
or any of its Affiliates; and
(vi) a description in reasonable detail of the
trading strategies, activities, assets and liabilities of NRG
Power Marketing, Inc. ("power marketing"), including of its
material contracts (other than "spot" contracts) with third
parties and with Subsidiaries of NRG Energy and its practices
in dealing with the Project Subsidiaries, including as to
allocating benefits and costs associated with its power supply
and fuel purchase agreements among such Project Subsidiaries.
Such description shall also contain a listing of the required
or requested collateral calls made or anticipated to be made
upon Power Marketing. Such description shall be prepared in
consultation with FTI Xxxxxxxx & Xxxxx, LLC, who shall be
given access to supporting information.
(d) The Support and Capital Subscription Agreement, dated as
of May 29,2002, between NRG Energy and Xcel Energy (the "XCEL SUPPORT
AGREEMENT") shall be in full force and effect. The agreement in
substantially the form attached hereto as Exhibit A (the
"XCEL ACKNOWLEDGMENT") shall be in full force and effect. NRG Energy
shall have delivered a fully executed copy of the Xcel Acknowledgment
to the Agents;
(e) Xcel Energy shall have executed and delivered to each of
the Agents a letter agreement in substantially the form attached
hereto as Exhibit B (the "XCEL LETTER");
(f) NRG Energy shall have paid all accrued and unpaid costs,
fees and expenses of the Advisors (as defined below) as of the date
hereof; and
(g) Each of the Flinders Letter (as defined below) and the
Enfield Letter (as defined below) shall be in full force and effect and
each such letter shall have been amended to provide for an extension
thereof until at least November 15,2002.
(h) Power Marketing shall have entered into a security
agreement in a form satisfactory to counsel for the Global Steering
Committee (as defined below) to secure its obligations to NRG Energy as
contemplated in paragraph 4(e)(ii)(E) below and shall have filed,
registered or recorded, or caused to be filed, registered or recorded
financing statements in order to create in favor of NRG Energy a
perfected first priority Lien on the collateral described therein.
(i) Xcel Energy shall have submitted to the Securities and
Exchange Commission an amendment to its Form U- 1
Application-Declaration under the Public Utility Holding Company Act in
a form satisfactory to counsel to the Global Steering Committee.
3. Representations and Warranties. Each NRG Party hereby
represents and warrants to each of the Lenders and Agents as follows:
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(a) It and each of its Subsidiaries is (i) duly organized or
formed, validly existing, and, to the extent applicable, in good
standing under the laws of the jurisdiction of its organization or
formation, (ii) is duly qualified and, to the extent applicable, in
good standing under the laws of each other jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to be so qualified or licensed, and (iii) has all requisite
power and authority to own or lease and operate its property and to
carry on its business as now conducted and as proposed to be conducted.
(b) Its execution, delivery and performance of this Second
Collateral Call Extension Letter is within its powers, has been duly
authorized by all necessary corporate or other action, and does not (i)
contravene its charter, by laws or other similar constituent or
organizational documents, (ii) violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
applicable to it or any of its Subsidiaries or any of their respective
properties, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting it or any of its Subsidiaries
or any of their respective properties or (iv) result in or require the
creation or imposition of any lien or other similar encumbrance upon or
with respect to any of its properties or the properties of its
Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for its execution, delivery or
performance of this Second Collateral Call Extension Letter.
(d) This Second Collateral Call Extension Letter has been duly
executed and delivered by it and constitutes its legal, valid and
binding obligation.
(e) There is no action, suit, investigation, litigation or
proceeding affecting it or any of its Subsidiaries pending or, to the
best of its knowledge, threatened before any court, governmental agency
or arbitrator that purports to affect the legality, validity or
enforceability of this Second Collateral Call Extension Letter.
(f) Neither it nor any of its Subsidiaries or Affiliates has
paid or entered into or approved any other arrangement for the payment
of any fee or other consideration to any of the Lenders or the Agents
or any of their Affiliates in respect of such Lender's or Agent's
execution of this Second Collateral Call Extension Letter or to any
other lender or creditor in respect of any similar agreement,
including, without limitation, (i) that certain letter agreement, dated
August 13,2002, from National Australia Bank Limited to NRGenerating
Holdings (No. 2) GmbH, Flinders Labuan (No. 1) Ltd., Flinders Labuan
(No. 2) Ltd., and Flinders Power Finance Pty Ltd. in respect of the
Syndicated Facility Agreement, dated September 7,2000, between Flinders
Power Finance Pty Ltd. and certain other parties thereto (as amended,
the "FLINDERS LETTER") and (ii) that certain letter agreement, dated
August 19,2002, from ABN AMRO Bank N.V., as Bank Agent to Enfield
Energy Centre Limited and NRG Energy Inc. in respect of the Enfield
Energy Centre Limited (pound sterling) 219,681,000 Project Finance
Facilities dated 12 December 1997 between, Enfield Energy Centre
Limited and ABN AMRO Bank N.V., as Bank Agent and Technical Agent (as
amended, the "ENFIELD LETTER").
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(g) Neither it nor any of its Subsidiaries is party to any
Debt Instrument pursuant to which any Event of Default has occurred
which would allow any lender or other party thereto to accelerate any
amounts owed under such Debt Instrument or take any other remedial
action with respect thereto, other than: (i) any such Event of Default
that has been waived in accordance with the terms of such Debt
Instrument, (ii) any Event of Default arising in connection with the
bankruptcy of PG&E, (iii) any such Event of Default arising out of
amounts due under any power marketing agreement, and (iv) any such
Event of Default arising in connection with an Exempted Project.
(h) All of the information delivered to the Agents pursuant to
paragraph 2(c) above or paragraph 4(b) below is true, correct and
complete in all material respects and does not omit any material
information required to be contained therein and the estimated or
projected financial information provided pursuant to paragraph 2(c)
above or paragraph 4(b) below was prepared in good faith on the basis
of the assumptions set forth therein, which assumptions are fair in
light of the conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, NRG Energy's best
estimate of its and, to the extent applicable, its Subsidiaries' future
financial performance. The Xcel Support Documents (as defined below)
(i) constitute all of the written agreements with respect to which Xcel
Energy or any of its Subsidiaries (other than any NRG Energy or any of
its Subsidiaries) have undertaken to provide equity contributions,
guaranties, subordinated loans or provide any other financial support
to, or on behalf of, NRG Energy or any of its Subsidiaries, (ii) have
not been amended, modified or otherwise supplemented from the forms
delivered to the Agents (including any amendments or supplements so
delivered), and (iii) are in full force and effect, enforceable against
Xcel Energy and each other party thereto in accordance with their
respective terms.
(i) Neither the Flinders Letter nor the Enfield Letter provide
for a termination prior to the earlier to occur of November 15,2002 and
the occurrence of a Termination Event and neither is on terms more
favorable to the Lenders thereunder than the terms of this Second
Collateral Call Extension Letter are to the Lenders.
(j) Xcel Energy is not obligated, either directly or
indirectly, as primary obligor, guarantor or otherwise, to pay or
provide any financial support in respect of any costs incurred by NRG
Energy or any of its Subsidiaries in connection with any Capital
Expenditure (including any construction costs) related to the conduct
of NRG Energy's or such Subsidiary's business on or prior to November
15,2002.
(k) NRG Energy and its subsidiaries performed and observed in
all material respects the terms, covenants and agreements applicable to
them in the Initial Collateral Call Extension Letter.
4. Covenants. Until the occurrence of the Waiver Termination
Date, NRG Energy hereby agrees as follows:
(a) At any reasonable time and from time to time, it shall
permit (or cause to be permitted) any of the Advisors or any Agent or
Lender through its attorneys, advisors or
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consultants, to examine and make copies of and abstracts from the
records and books of account of, and visit its properties and the
properties of its Subsidiaries, and to discuss its and its
Subsidiaries' affairs, finances and accounts with any of their
respective officers or directors or independent certified public
accountants or other advisors or consultants. Subject to the provisions
of paragraph 15 of this Second Collateral Call Extension Letter, it
shall, and shall cause each of its Subsidiaries to, cooperate with the
Advisors and any Agent or any Lender through its attorneys, advisors or
consultants, and to provide information reasonably requested by the
Advisors or any Agent or Lender through its attorneys, advisors or
consultants that is in its possession with respect to NRG Energy or any
of its Subsidiaries or Affiliates.
(b) It shall deliver to each of the Agents:
(i) by no later than 12:00 (noon) p.m. on each Friday
commencing with the first full week after the execution date
all conditions set forth in paragraph 2 have been satisfied,
(A) consolidating and consolidated statements of cash flow
(including cash receipts and disbursements) for NRG Energy and
it Subsidiaries (covering the same Subsidiary level as the
Cash Forecast) for the immediately preceding week, setting
forth in comparative form actual cash flow and planned cash
flow from the Cash Forecast for the immediately preceding week
which shall include a written report explaining any material
variances and all supporting assumptions relied upon, (B) a
detailed schedule of each payment or other transaction between
NRG Energy or any of its Subsidiaries and any Affiliate
thereof (other than NRG Energy or any of its Subsidiaries),
including, without limitation, Xcel Energy, during the
immediately preceding week, (C) a detailed schedule of each
payment made by NRG Energy or any of its Subsidiaries in
excess of $50,000 (or the currency equivalent thereof) during
the immediately preceding week identifying payor and payee and
if payee is a bank identifying the beneficiary thereof, (D) a
13-week rolling forecast of cash flow and expenditures for the
subsequent 13 weeks in the same form as the Cash Forecast for
the period commencing with the Monday of the same week and (E)
a detailed schedule of all collateral calls in respect of
Power Marketing's obligations setting forth with respect to
each such collateral call, the amount, the trading
counterparty, the Project Subsidiary on whose behalf Power
Marketing is trading and an explanation as to the reason such
Project Subsidiary was unable to post such collateral call on
its own behalf;
(ii) concurrently with the delivery of information
pursuant to paragraph 4(b)(i) above, a certificate of the
chief financial officer or treasurer of NRG Energy stating
that (A) no Termination Event has occurred or is continuing,
(B) NRG Energy and its Subsidiaries are in compliance with the
terms of this Second Collateral Call Extension Letter, (C) no
payments have been made with respect to turbines (other than
in connection with any Exempted Project to the extent funded
with Debt incurred in connection with such Exempted Project),
(D) neither NRG Energy nor any of its Subsidiaries has engaged
in any speculative trading and (E) NRG Energy was in
compliance with paragraph 4(p) below for each day of the
preceding week;
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(iii) by no later than 23 days after the end of each
month (commencing with August 2002), (A) the consolidating and
consolidated balance sheets, income statements and cash flow
statements (including cash receipts and disbursements) for NRG
Energy and each of its Subsidiaries (on a Subsidiary by
Subsidiary basis) for such month, setting forth in each case
in comparative form (commencing with the statements for
September 2002) the figures from the statements referred to in
paragraph 4(b)(v) below which shall include a written report
explaining any material variances and all supporting
assumptions relied upon, (B) a narrative discussion and
analysis of the financial condition and results of operations
of NRG Energy and its Subsidiaries for such month, as compared
to the previous month, (C) a schedule setting forth a listing
by Debt Instrument and in the aggregate of payments of
principal of and interest on the Debt of NRG Energy and its
Subsidiaries due during the succeeding twelve-month period
(including the dates when due and any applicable grace periods
and whether or not such payments are anticipated to be made)
and (D) a schedule setting forth as of the end of such month
all outstanding loans and open advances made by Xcel Energy,
NRG Energy or any of their Subsidiaries to NRG Energy, any of
its Subsidiaries or any of its Affiliates;
(iv) by no later than 23 days after the end fiscal
quarter, a schedule setting forth a listing by Debt Instrument
and in the aggregate of payments of principal of and interest
on the Debt of NRG Energy and its Subsidiaries due during the
succeeding five-year period (including the dates when due and
any applicable grace periods and whether or not such payments
are anticipated to be made);
(v) by no later than the 25th day of each month
(commencing September 25,2002), forecasts prepared by
management of NRG Energy of consolidated and consolidating
balance sheets, income statements and cash flow statements
(including cash receipts and disbursements) for NRG Energy and
each of its Subsidiaries (on a Subsidiary by Subsidiary basis)
for each month and the last day of such month in the next
three-month period commencing on the first day of the next
month;
(vi) on or prior to October 15, 2002, a not less than
three-year detailed business plan for NRG Energy and its
Subsidiaries that has been approved by the Board of Directors
of NRG Energy for presentation to its creditors (the "BUSINESS
Plan"), and the Business Plan or information provided
concurrently with it shall describe the assumptions used in
the preparation thereof and include supporting detail for the
valuations used as the basis for the decision-making with
respect to projects which is reflected therein. The Business
Plan shall be in scope and detail reasonably satisfactory to
the Agents;
(vii) on or prior to October 31, 2002, a detailed
restructuring plan approved by the Board of Directors of NRG
Energy that provides for (1) the Proposed Restructuring of NRG
Energy and its Subsidiaries and (2) Xcel Energy
10
to satisfy its obligations under the Xcel Support Agreement
and Xcel Acknowledgement;
(viii) to the extent not previously provided pursuant
to the Initial Collateral Call Extension Letter, on or prior
to September 27,2002, copies of (A) all tax sharing agreements
and arrangements, Debt Instruments, Capital Expenditure
Agreements, Lease Agreements and Other Material Agreements
together with any amendments, modifications and supplements
thereto and any other material documents or agreements
relating thereto or entered into in connection therewith, (B)
any other material agreement relating to the ownership,
development, construction, operation or maintenance of any of
the businesses or properties of NRG Energy and its
Subsidiaries, (C) any agreement relating to any material
supply arrangements entered into by NRG Energy or any of its
Subsidiaries, (D) any material contract or agreement relating
to the sale or proposed sale of energy by NRG Energy or any of
its Subsidiaries or any of their assets or properties and (E)
any surety instrument, performance bond, guaranty or other
similar instrument or agreement issued or entered into by Xcel
Energy with respect to the power marketing obligations of NRG
Energy or any of its Subsidiaries (collectively, the "XCEL
POWER MARKETING GUARANTEES" and together with the Xcel Support
Agreement and Xcel Acknowledgement, the "Xcel SUPPORT
DOCUMENTS");
(ix) written notice at least five days prior to (A)
entering into any transaction with any Affiliate or (B) making
any payment or payments in an aggregate amount over $100,000
(or the currency equivalent thereof) that are not specifically
reflected on the Cash Forecast or on a schedule thereto;
(x) promptly upon receipt thereof, copies of all
notices, requests and other documents received by NRG Energy
or any of its Subsidiaries under the Flinders Letter, the
Enfield Letter or any Debt Instrument, Capital Expenditure
Agreement, Lease Agreement or Other Material Agreement
regarding or related to any breach or default by any party
thereto or any other event that could materially impair the
value of the interests or the rights of NRG Energy or any of
its Subsidiaries in respect of such agreement or which could
otherwise reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of NRG Energy
or any of its Subsidiaries or NRG Energy's or any of its
Subsidiaries' ability to perform its obligations under any of
the Agreements or this Second Collateral Call Extension Letter
and copies of any amendment, modification or waiver of any
provisions of any Debt Instrument, Capital Expenditure
Agreement, Lease Agreement or Other Material Agreement;
(xi) promptly after the commencement thereof, notice
of any action, suit, investigation, litigation or proceeding
before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting NRG Energy or any of its Subsidiaries or Affiliates
which could reasonably be expected to have a material adverse
effect on the business,
11
condition (financial or otherwise), operations, performance,
properties or prospects of NRG Energy or any of its
Subsidiaries or NRG Energy's or any of its Subsidiaries'
ability to perform its obligations under any of the Agreements
or this Second Collateral Second Call Extension Letter;
(xii) promptly after the filing thereof, copies of
any financial statements or reports that Xcel Energy, NRG
Energy or any of its Subsidiaries sends to its stockholders,
members or partners, and copies of all regular, periodic and
special reports that NRG Energy or any of its Subsidiaries or
Affiliates files with the Securities and Exchange Commission
or any similar governmental authority;
(xiii) promptly after the furnishing thereof, copies
of any statement, report or document furnished to any creditor
of NRG Energy or any of its Subsidiaries which has not
otherwise been furnished to the Agents pursuant to the
Agreements or this Second Collateral Call Extension Letter;
(xiv) by no later than 12:00 (noon) p.m. on each
Wednesday, commencing with Wednesday September 18,2002, a
detailed written report setting forth the developments and
activities during the week covered thereby with respect to
contemplated asset sales (such reports shall include, by way
of example, (1) any change in the anticipated closing date of
each asset sale, (2) expected net cash proceeds of each asset
sale, (3) number of bidders, (4) status of regulatory
clearances, as applicable and (5) drafts of all agreements
that have been circulated among the parties with respect to
such asset sales), the first such report to include all
developments and activities since September 2,2002;
(xv) from time to time upon request by any of the
Co-Chairs of the Global Steering Committee (as defined below)
and otherwise as may be considered appropriate by NRG Energy,
a report describing any material discussions that Xcel Energy,
NRG Energy or any of its Subsidiaries (including
representatives and advisors of NRG Energy or any of its
Subsidiaries) has had with any material creditor of NRG Energy
or any of its Subsidiaries;
(xvi) on or prior to October 15,2002, deliver a
written transition, remediation and security plan that
provides for the winding down of each of the Exempted
Projects; provided, that such plan must be reasonably
satisfactory to the Agent for the Lenders party to any Debt
Instrument relating to such Exempted Project and to the
Co-Chairs of the Global Steering Committee; and
(xvii) promptly, notice of any demand or notices of
termination or default received by NRG Energy or any of its
Subsidiaries under or in respect of the Flinders Letter, the
Enfield Letter or any Debt Instrument, Capital Expenditure
Agreement, Lease Agreement or Other Material Agreement that
may be material to the interests of NRG Energy or the Lenders.
(c) It shall cause its and its Subsidiaries' management and
officers to be available to meet with the Agents, the Lenders and any
of their attorneys, advisors or consultants,
12
including, without limitation, the Advisors on a regular basis as
reasonably requested from time to time by the Agents or Advisors.
(d) It shall cooperate in taking all actions necessary to
protect and preserve the rights of NRG Energy under the Xcel Support
Agreement and Xcel Acknowledgement, including by taking such actions as
may be necessary to ensure that its rights and remedies under the Xcel
Support Agreement and Xcel Acknowledgement shall not be affected by the
commencement by or against NRG Energy of any bankruptcy proceeding.
(e) It shall not create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names it or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist any
security agreement authorizing any secured party thereunder to file
such financing statement or assign, or permit any of its Subsidiaries
to assign, any accounts or other right to receive income, except:
(i) Liens in effect as of the date hereof;
(ii) each of the following, as to which no
enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced:
(A) Liens for taxes, assessments and
governmental charges or levies not yet due and
payable;
(B) Liens imposed by law, such as materialmen's,
mechanics', carriers, workmen's and repairmen's liens
(i) that are with respect to obligations not overdue
for a period of more than 30 days and do not
materially adversely affect the use of the property
to which they relate, or (ii) in the case of Liens on
any Exempted Project, that result from the
non-payment of obligations with respect to an
Exempted Project;
(C) pledges or deposits to secure obligations
under workers' compensation laws or similar
legislation or to secure public or statutory
obligations;
(D)easements, rights of way and other
encumbrances on title to real property that do not
render title to the property encumbered thereby
unmarketable or materially adversely affect the use
of such property for its present purposes; and
(E) Liens resulting from collateral calls in
respect of Power Marketing's obligations in an
aggregate amount at any one time outstanding not to
exceed $20,000,000 (or the currency equivalent
thereof), plus (x) any collateral calls funded by any
Project Subsidiary
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with its own cash resources (including loans or
advances by lenders to it) and (y) any collateral
calls previously met with funds as permitted under
the Initial Collateral Call Extension Letter;
provided, that to the extent that NRG Energy or any
of its non-Project Subsidiaries funds any such
collateral call, (i) the trading agreement or
arrangement related to such collateral call is not
supported by a guarantee or other credit support by
Xcel Energy, (ii) NRG Energy's funding thereof shall
take the form of a loan to Power Marketing evidenced
by a note in a form satisfactory to counsel to the
Global Steering Committee and such loan shall be
secured by a perfected first priority security
interest in the assets (including contract rights and
other general intangibles) of Power Marketing to the
extent such a security interest may be granted
therein under the contractual obligations of NRG
Energy and its Subsidiaries and may be so granted
without requiring an equal and ratable Lien in favor
of any other person and (iii) in the reasonable
judgment of NRG Energy, the funding of any such
collateral call provides a material benefit to a
project which is not an Exempted Project. Such
$20,000,000 may be increased with the consent of the
Agents.
(iii) transfers of revenues received by NRG Energy or
its Subsidiaries to any account (including any debt service
reserve account or other similar collateral account) required
pursuant to the terms of any Debt Instrument as in effect as
of the date hereof.
(f) It shall not, directly or indirectly, optionally prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner or enter into any transaction the
economic consequence of which would be the same, or make any payment in
violation of any subordination terms of any Debt owed by it or any of
its Subsidiaries, or amend, modify or change in any manner any material
payment term of any such Debt or permit any of its Subsidiaries to do
any of the foregoing.
(g) Except to the extent otherwise expressly provided in this
Second Collateral Call Extension Letter, it shall not sell, lease,
transfer or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets, or grant any
option or other right to purchase, lease or otherwise acquire any
assets to, in each case, any of its Affiliates (other than to NRG
Energy and its Subsidiaries and in the ordinary course of business).
(h) It shall not make or hold, or permit any of its
Subsidiaries to make, or hold any investment in or loan to any of its
Affiliates, except for (i) investments or loans in existence as of the
date hereof or (ii) investments by NRG Energy or its Subsidiaries in
their Subsidiaries to the extent the proceeds thereof are used to make
any payments listed on the Cash Forecast or a schedule thereto.
(i) It shall not declare or pay any dividend, purchase,
redeem, retire, defease or otherwise acquire for value any of its
equity interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent persons
thereof) as
14
such, make any distribution of assets, equity interests, obligations or
securities to its stockholders, partners or members (or the equivalent
persons thereof) as such or permit any other NRG Collateral Party to do
any of the foregoing, or permit any other NRG Collateral Party to
purchase redeem, retire, defease or otherwise acquire for value any
equity interests in NRG Energy or any of its Affiliates.
(j) It shall not create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any indebtedness or other obligations as lessee (i) for the
rental or hire of real or personal property in connection with any sale
and leaseback transaction or (ii) for rental or hire of other real or
personal property of any kind under leases or agreements to lease
(including, without limitation, any capitalized lease) except for such
Lease Agreements as are in existence as of the date hereof or are
entered into in the ordinary course of business in a manner consistent
with the past practice of NRG Energy or such Subsidiary.
(k) It shall not engage, or permit any of its Subsidiaries to
engage, in any transaction involving any Swap Contract except for such
transactions as are entered into in the ordinary course of business in
a manner consistent with the past practice of NRG Energy or such
Subsidiary.
(1) It shall not make, nor permit any of its Subsidiaries to
make, any Capital Expenditure except for:
(i) such obligations as it or its Subsidiaries have
incurred as of the date hereof pursuant to a legally binding
Capital Expenditure Agreement and which are payable on or
prior to the Waiver Termination Date in accordance with their
terms; and
(ii) obligations incurred in the ordinary course of
business after the date hereof in a manner consistent with the
past practice of NRG Energy or such Subsidiary which are
payable on or prior to the Waiver Termination Date in
accordance with their terms and the terms of this Agreement
and the Xcel Letter.
(m) It shall not make any payment, or permit any of its
Subsidiaries to make any payment, to any other Person (including Xcel
Energy or any Affiliate thereof) except for payments specifically
contemplated (in amount and timing) by the Cash Forecast and in
accordance with the other provisions of this Second Collateral Call
Extension Letter or the Xcel Letter. For purposes of this paragraph
4(m), the Cash Forecast shall refer to a revised version of the Cash
Forecast which NRG Energy shall prepare and deliver to the Lenders upon
delivery of the Business Plan if at the time thereof NRG Energy is
designating additional projects as Exempted Projects as contemplated by
the definition thereof, which revised version shall only omit payments
by NRG Energy and its other Subsidiaries to or on behalf of the Project
Subsidiaries related to such additional Exempted Projects as NRG Energy
reasonably determines are appropriate as a result of such designation.
15
(n) It shall not, nor shall it permit any of its Subsidiaries
to, incur any indebtedness or other obligation which involves
consideration payable by it or any of its Subsidiaries in excess of
$100,000 (or the currency equivalent thereof) in the aggregate, other
than any such obligation incurred in the ordinary course of business in
a manner consistent with the past practice of NRG Energy or such
Subsidiary.
(o) It shall not enter into any amendment, side letter or
similar agreement or other commitment with any Lender or other creditor
of NRG Energy or any of its Subsidiaries (other than trade and similar
creditors the obligations owing to which are not material in relation
to the Debt of NRG Energy and its Subsidiaries) that has the effect of
establishing rights, creating improvements of position or otherwise
benefiting such Lender or creditor, as the case may be, in a manner
more favorable in any respect to such Lender or creditor, as the case
may be, than the rights, improvements and benefits established in favor
of the Lenders by this Second Collateral Call Extension Letter.
(p) It shall not permit for any day the aggregate available
cash resources (excluding any restricted or segregated cash or cash
subject to any Lien) of NRG Energy and its Subsidiaries which are not
Project Subsidiaries or foreign Subsidiaries to be less than the amount
set forth opposite the week in which such day occurs on Schedule 1
hereto, plus (i) 85% of the net proceeds from asset sales received by
NRG Energy and such Subsidiaries since the date hereof (including any
such net proceeds received by them from asset sales by Project
Subsidiaries or foreign Subsidiaries), (ii) 85% of the other amounts
received by NRG Energy and such Subsidiaries from Project Subsidiaries
in the United States since the date hereof not contemplated by the Cash
Forecast, (iii) 50% of the other amounts received by NRG Energy and
such Subsidiaries from foreign Subsidiaries or other foreign sources
since the date hereof (other than amounts received under clause (i)
above) and (iv) other cash inflows received by NRG Energy and such
Subsidiaries from other sources not contemplated by the Cash Forecast.
To the extent consistent with the Debt Instruments to which such
Project Subsidiary is a party, it shall cause each Project Subsidiary
to dividend or advance to it all cash which is available to such
Project Subsidiary for distribution and is not reasonably necessary for
the conduct by such Project Subsidiary of its business or activities.
(q) It shall not and shall not permit any of its Subsidiaries
to enter into any agreement or understanding to make any material
payment payable after November 15, 2002, except for agreements or
understanding, entered into in the ordinary course of business in a
manner consistent with the past practices of NRG Energy or such
Subsidiary. In no event shall Power Marketing enter into any trading
contract for a period that is in whole or in part past November 15,
2002 unless such trading contract is nonspeculative in nature and is
part of a series of relating trading contracts that assure a favorable
fuel purchase and power supply arrangement for a particular project or
region.
(r) To the extent practicable, it shall not commingle or
permit Power Marketing or any of its other Subsidiaries to commingle
cash of its Project Subsidiaries with separate indebtedness with the
cash of NRG Energy or any other of its Subsidiaries, and if and to the
extent there is any such commingling, it shall take appropriate
measures to track and record such cash. It shall cause Power Marketing
to settle no less often than
16
weekly all of its payment obligations to NRG Energy and its other
Subsidiaries; and on or prior to October 9, 2002 it shall cause Power
Marketing to remit to each Project Subsidiary all power revenues for
sales by Power Marketing of station power generated by such Project
Subsidiary through the period ending on September 30, 2002, to the
extent that the same have not been therefore remitted to such Project
Subsidiary, with any such amount being subject only to charges not
previously paid by such Project Subsidiary and determined in accordance
with applicable agreements and Power Marketing's current practices in
dealing with the Project Subsidiaries generally.
(s) It shall not make or meet or cause to be made or met any
payment (including the providing of any cash collateral) or collateral
call using the cash of NRG Energy or any of its other Subsidiaries for
the benefit of a Project Subsidiary if such payment or capital call can
be made or met by such Project Subsidiary with its own cash resources,
including from cash that has been "restricted" pursuant to the terms of
an agreement in existence on the date hereof but that is available
under such agreement for use to make such payment for such.
(t) It shall not permit Power Marketing to (i) terminate, or
fail to utilize the rights and benefits available to it under, any
trading contract or arrangement supported by a guarantee or other
credit support from Xcel Energy, unless such termination or failure is
in the best interest of NRG Energy and its Subsidiaries, or (ii)
release Xcel Energy from any guarantee or credit support with respect
to any trading contract or arrangement.
(u) It shall not effect any amendment, modification or waiver
to the Xcel Support Agreement or the Xcel Acknowledgement.
5. No Further Advances Etc. Each of the NRG Parties on behalf
of itself and its Subsidiaries hereby agrees and acknowledges that prior to the
Waiver Termination Date it will not make, nor shall any of its Subsidiaries
make, any further draws or requests for loans, advances or the issuance of any
letters of credit or other extensions of credit under any of the Agreements
without the express written consent of the Required Percentage of Lenders
required to waive any condition precedent to the making of such draw, loan or
advance or the issuance of any letter of credit or the making of any other
extension of credit under the terms of such Agreement (or the related Primary
Agreement); provided, that notwithstanding the foregoing, nothing in this Second
Collateral Call Extension Letter shall prohibit the rollover of any outstanding
loan or advance on the date regularly scheduled for such rollover under any of
the Agreements or the deemed making of any loan or advance under any of the
Agreements as a result of the payment by any of the Lenders or Agents of any
amounts required to protect any collateral under the Agreements or as otherwise
provided for under the Agreements.
6. Termination Events. Upon the occurrence of any of the
following events (each such event being a "TERMINATION EVENT"):
(a) Any representation or warranty made by any NRG Party (or
any of its officers) under or in connection with this Second Collateral
Call Extension Letter or any document delivered pursuant hereto shall
prove to have been incorrect in any material respect when made; or
17
(b) Any NRG Party shall fail to perform or observe any other
term, covenant or agreement contained in this Second Collateral Call
Extension Letter on its part to be performed or observed; or
(c) Xcel Energy shall fail to perform or observe any term,
covenant or agreement contained in the Xcel Letter on its part to be
performed or observed, shall contest or deny the enforceability of any
of its obligations thereunder or under the Xcel Support Agreement or
shall fail to perform or observe any term, covenant or agreement
contained in the Xcel Acknowledgment; or
(d) Any Event of Default (other than (i) any Event of Default
that has been waived in accordance with the terms of the relevant
Agreement or Debt Instrument, (ii) an Event of Default arising in
connection with the bankruptcy of PG&E or any Exempted Project, (iii)
any Event of Default existing on the date hereof arising out of amounts
due under any power marketing agreement or in respect of any Exempted
Project and (iv) any Event of Default arising out of a failure by NRG
Energy or any of its Subsidiaries to make payment when due on account
of principal or interest on any Debt, including under the Agreements
but excluding any such Event of Default which has arisen out of or
serves as the basis of any acceleration of any such Debt) under any
Agreement or Debt Instrument shall occur and continue for one (1) day
without waiver by the Required Percentage of Lenders party to such
Agreement (or related Primary Agreement) or the requisite percentage of
lenders or creditors under any other Debt Instrument required to
consent to such waiver under the terms of such Agreement, or other Debt
Instrument as the case may be; provided that (x) any Event of Default
which has arisen out of or serves as the basis of any acceleration of
any Debt and (y) the occurrence of any insolvency or bankruptcy event
in respect of NRG Energy or any of its Subsidiaries (other than any
Project Subsidiary owning an Exempted Project) which constitutes an
Event of Default, in each such case, shall result in an immediate and
automatic termination of this Second Collateral Call Extension Letter
without giving effect to any grace period in connection therewith; or
(e) Xcel Energy shall invest or commit to invest (within the
meaning of Rule 53(a)(l)(i) of the Public Utility Holding Company Act)
in any Person that is an "exempt wholesale generator" or "foreign
utility company" (in either case as defined under the Public Utility
Holding Company Act) other than NRG Energy which investment or
commitment to invest shall reduce the amount permitted to be invested
or committed to be invested in NRG Energy and its Subsidiaries under
the Public Utility Holding Company Act (including, without limitation,
under Rule 53 and 54 thereunder); or
(f) Any other agreement similar in effect to this Second
Collateral Call Extension Letter entered into in respect of any Debt
Instrument shall terminate, including, without limitation, the Flinders
Letter; or
(g) Any of Xxxxx, Day, Xxxxxx & Xxxxx, Lazard Freres & Co. LLC
or Xxxxx Xxxxxx LLC (or any other replacement advisor reasonably
acceptable to the Lenders) shall no longer be acting as an advisor to
NRG Energy; or
18
(h) Xcel Energy shall no longer own and control 100% of the
equity interests in NRG Energy or Xcel Energy shall make any public
statement that is contrary to its statement in the last sentence of the
third paragraph of Note 6 of the Notes to Consolidated Statements in
its Form 10-Q filed with the Securities and Exchange Commission for the
fiscal quarter ended June 30, 2002 and which was filed on August 14,
2002 and which is a material adverse change to the prospects of NRG
Energy and its Subsidiaries or Xcel Energy shall fail to make the tax
sharing payments to NRG Energy and its Subsidiaries contemplated by the
Cash Forecast; or
(i) any federal, state or local governmental agency or
regulatory body (including, without limitation, the Securities and
Exchange Commission) shall take any action that may reasonably be
expected to limit Xcel Energy's ability to perform its obligations
under the Xcel Support Agreement or the Xcel Acknowledgment;
then, and in any such event, (A) if such event is a Termination Event specified
in the proviso to clause (d) of this paragraph 6 above, automatically this
Second Collateral Call Extension Letter shall immediately terminate, and (B) if
such event is any other Termination Event then, with the consent of any Agent(s)
representing at least 25% by amount of the Lenders or of any three or more
Agents and notice from such Agent(s) to NRG Energy, this Second Collateral Call
Extension Letter shall immediately terminate.
7 . Exempted Projects. Notwithstanding anything herein to the
contrary, each of the parties hereto xxxxxx agrees and acknowledges that with
respect to each of the Exempted Projects:
(a) Each Lender and Agent party to any Debt Instrument
governing or evidencing any Debt incurred by any Project Subsidiary in
respect of such Exempted Project (each such Debt Instrument, being a
"EXEMPTED PROJECT DEBT INSTRUMENT") shall not be prejudiced or limited
by any of the waivers or extensions contemplated by this Second
Collateral Call Extension Letter in connection with its exercise of
remedies in connection with such Exempted Project, Project Subsidiary
or any collateral provided to secure such defaulted Exempted Project
Debt Instrument, including without limitation, foreclosure of any
equity interests in a Project Subsidiary pledged by NRG Energy or any
of its Subsidiaries;
(b) NRG Energy and each of its Subsidiaries each hereby
acknowledge and agree that, by entering into this Second Collateral
Call Extension Letter, each of NRG Energy and each of its Subsidiaries
does hereby waive, for the benefit of each holder or owner of an
interest in an Exempted Project Debt Instrument, any defense,
affirmative defense, offset, claim or counterclaim under any legal or
equitable theory based upon the fact that NRG Energy (in respect of the
Exempted Project at issue) is not named in any action or claim
commenced at any time prior to the Waiver Termination Date to enforce
remedies in respect of a default under the applicable Exempted Project
Debt Instrument (a "COVERED ACTION"). Each of NRG Energy and each of
its Subsidiaries each hereby further expressly waives the right to
assert as a defense, affirmative defense, offset, claim or counterclaim
in respect of any action or claim to enforce obligations of NRG Energy
(in respect of the Exempted Project at issue) in respect of any
Exempted Project Debt
19
Instrument: (i) the argument that NRG Energy is or was an indispensable
party to such Covered Action; (ii) the argument that all claims arising
out of the same general set of facts should have been joined in a
single action; (iii) any argument based upon latches, waiver or
estoppel due to the failure to name NRG Energy in such Covered Action;
or (iv) the running of any applicable statute of limitations during the
pendency of this Second Collateral Call Extension Letter. Each of NRG
Energy its Subsidiaries hereby acknowledge the assistance of counsel in
making the foregoing waivers and acknowledge that such waivers are
intended to facilitate the success of this letter agreement by
permitting lenders to Exempted Projects to enforce rights against the
Exempted Projects, the Project Subsidiaries and any collateral pledged
in support of the respective Exempted Projects, the Project
Subsidiaries and any collateral pledged in support of the respective
Exempted Project Debt Instrument without prejudice to their rights
under agreements with NRG Energy in respect of the Second Collateral
Extension;
(c) NRG Energy and the Lenders and Agents party to the
Exempted Project Debt Instrument relating to such Exempted Project may
enter into discussions for, and consummate, a restructuring of each
such Exempted Project (each a "EXEMPTED PROJECT RESTRUCTURING"), which
may include a transfer of all or some of the assets of such Exempted
Project or the equity interests of the Project Subsidiary owning such
Exempted Project or such other actions as may be agreed between NRG
Energy and the Lenders and Agents parties to such Exempted Project Debt
Instrument in respect of such Exempted Project and, nothing in this
Second Collateral Call Extension Letter shall limit the terms and
conditions of any such Exempted Project Restructuring or any of the
agreements or undertakings of NRG Energy entered into in connection
therewith, and
(d) NRG Energy shall take all steps and actions and otherwise
cooperate with each Agent party to an Exempted Project Debt Instrument
as such Agent may reasonably request in connection with the
preservation of the value of each Exempted Project and appropriate
safeguarding and remediation efforts with respect thereto to the extent
such request entails no material expenditure or disadvantage to NRG
Energy that may materially and adversely affect creditors of NRG
Energy.
8. Reservation of Rights. NRG Energy acknowledges and agrees
that, other than with respect to the waivers and extension set forth
specifically in this Second Collateral Call Extension Letter, the Lenders and
the Agents party to the various Debt Instruments shall preserve all rights and
remedies set forth therein and under applicable law, and nothing contained
herein shall in any way limit said rights or diminish any of the obligations of
NRG Energy or any of its Subsidiaries contained in any such Debt Instruments.
9. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be delivered to each Agent or Lender, as
the case may be, in accordance with the relevant notice provisions of each
Agreement to which such Agent or Lender is a party and to NRG Energy or any of
its Subsidiaries to NRG Energy at NRG Energy's address at PO Box 0000, 00
Xxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx Xxxxx; phone
number: (000) 000-0000; fax number: (000) 000-0000, and email:
Xxxxxxx.Xxxxx@Xxxxxxxxxx.xxx; with a copy to Xxxxx Day, Xxxxxx & Xxxxx at its
address at 77
20
West Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxx; phone
number (000) 000-0000 and fax number: (000) 000-0000.
10. Ratification Etc. Each of the Agreements are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, any guaranty or
collateral document relating to any of the Agreements and all of the collateral
described therein, if any, do and shall continue to guaranty or secure, as the
case may be, the payment of all obligations contemplated to be guaranteed or
secured by such guaranty or collateral under such collateral document. The
execution, delivery and effectiveness of this Second Collateral Call Extension
Letter shall not, except to the extent of the Collateral Extension and solely
with respect to Killingholme Facility Agreement, the Killingholme Waiver,
operate as a waiver of any right, power or remedy of any Lender or Agent under,
or any default (now or hereafter existing) of any NRG Party under, any of the
Agreements, at law or otherwise, nor constitute a waiver of any provision of any
Agreement.
11. Amendments; Waivers Etc. No amendment or waiver of any
provision of this Second Collateral Call Extension Letter or the Xcel Letter,
nor consent to any departure by NRG Energy, any NRG Party, Xcel Energy or any of
their respective Affiliates or Subsidiaries therefrom, shall in any event be
effective unless the same shall be in writing and signed by Signing Agents on
behalf of Lenders representing the same Required Percentage of Lenders under
each Primary Agreement as is required in connection with the granting of the
waivers contemplated by this Second Collateral Call Extension Letter. Any
amendment or waiver of any provisions of this Second Collateral Call Extension
Letter or the Xcel Letter or any further amendment or waiver of any Agreement
may be made by the Required Percentage of the relevant Lenders (each Lender
acting in its sole discretion).
12. Fees and Expenses. NRG Energy hereby agrees to pay on
demand (a) all fees, costs and expenses of (i) FTI Xxxxxxxx & Xxxxx, LLC, PA
Consulting Group, Inc. and Xxxxxxx Xxxxxxx & Xxxxxxxx or (ii) in the event that
any other attorney, advisor or consultant is substituted therefor or otherwise
appointed by the Lenders or Agents in respect of the Proposed Restructuring upon
the formation of any steering or coordinating committee by the Lenders (any such
committee being hereinafter referred to as the "GLOBAL STEERING COMMITTEE"),
such other attorney, advisors or consultants (collectively, the "ADVISORS")
incurred in connection with their acting as advisors to any of the Lenders,
Agents or the Global Steering Committee, as the case may be, in respect of this
Second Collateral Call Extension Letter or the Proposed Restructuring and (b)
all reasonable costs and expenses of each Agent and Lender in connection with
the preparation, execution and delivery of, or enforcement of, this Second
Collateral Call Extension Letter or the Xcel Letter or in connection with the
Proposed Restructuring, whether in any action, suit or litigation, or any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally or otherwise (including, without, limitation, the reasonable fees and
expenses of counsel for each Agent and Lender).
13. Indemnification. NRG Energy hereby agrees to indemnify and
hold harmless each Agent, each Lender and each of their Affiliates and their
officers, directors, employees, agents, advisors (including, without limitation,
the Advisors) and other representatives (each an "INDEMNIFIED PARTY") from and
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be
21
incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (a) this Second Collateral
Call Extension Letter or the Xcel Letter or (b) the Proposed Restructuring,
except to the extent such claim, damage, loss, liability or expense is found in
a final, nonappealable judgment by a court of competent jurisdiction to have
resulted directly and primarily from such Indemnified Party's gross negligence
or willful misconduct. In the case of an investigation, litigation or proceeding
to which the indemnity in this paragraph applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any NRG Party, any shareholder of any NRG Party, or any creditor of any NRG
Party or an Indemnified Party or an Indemnified Party is otherwise a party
thereto and whether or not the Proposed Restructuring is consummated. NRG Energy
further agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it or any of its
Subsidiaries or Affiliates or to its or their respective security holders or
creditors arising out of, related to or in connection with this Second
Collateral Call Extension Letter, the Xcel Letter or the Proposed Restructuring,
except for direct, as opposed to consequential, damages determined in a final
nonappealable judgment by a court of competent jurisdiction to have resulted
directly and primarily from such Indemnified Party's gross negligence or willful
misconduct.
14. Assignments and Participations. Each of the Lenders hereby
agrees that it will not assign or participate any of its rights or obligations
under any of the Agreements unless any such assignment or participation complies
with the provisions of such Agreement and any such assignee or participant has
agreed in writing to be bound by the terms hereof.
15. Confidentiality. Neither any Agent nor any Lender shall
disclose any Confidential Information (as defined below) to any Person without
the prior consent of NRG Energy, other than (a) to such Agent's or Lender's
Affiliates and their officers, directors, employees, agents, attorneys and
advisors and then only on a confidential basis, (b) as required by any law, rule
or regulation or judicial process, (c) as requested or required by any state,
Federal or foreign authority or examiner regulating such Lender, (d) to any
Lender or to any potential assignee or participant in respect of any Lender's
interest under any of the Agreements, (e) to any other Person to which such
Agent or Lender is permitted to disclose information pursuant to the
confidentiality provision contained in any Agreement and (e) to any rating
agency when required by it. "CONFIDENTIAL INFORMATION" means any information
that NRG Energy or any of its Subsidiaries furnishes to any Agent or Lender
pursuant to this Second Collateral Call Extension Letter in a writing designated
as confidential, but does not include any such information that is or becomes
generally available to the public (other than as a result of a breach by such
Agent or Lender of its obligations hereunder) or that is or becomes available to
such Agent or Lender from a source other then NRG Energy or any of its
Subsidiaries that is not, to the best of such Agent's or Xxxxxx's knowledge,
acting in violation of a confidentiality agreement with NRG Energy or such
Subsidiary.
16. Survival. Paragraphs l(b), 12, 13, 15, 18, 19 and 20 of
this Second Collateral Call Extension Letter shall survive any termination of
this Second Collateral Call Extension Letter or the occurrence of the Waiver
Termination Date. In addition, each representation and warranty made or deemed
to be made hereunder shall survive the making of such representation
22
and warranty and no Agent or Lender shall be deemed to have waived, by reason of
entering into this Second Collateral Call Extension Letter any claim it may have
that may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that any such Agent or Lender may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time it was made.
17. Counterparts Etc. This Second Collateral Call Extension
Letter may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Second Collateral Call Extension Letter by telecopier shall be effective as
delivery of an original executed counterpart of this Second Collateral Call
Extension Letter.
18. Submission to Jurisdiction, Etc. Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of ay New York State Court or Federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Second Collateral Call Extension Letter or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Second Collateral Call
Extension Letter shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Second Collateral Call Extension
Letter in the courts of any jurisdiction. Each of the parties hereto irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Second
Collateral Call Extension Letter in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
19. GOVERNING LAW. THIS SECOND COLLATERAL CALL EXTENSION
LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
20. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECOND COLLATERAL CALL EXTENSION LETTER OR IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
23
If you agree to the terms and provisions of this Second
Collateral Call Extension Letter please evidence such agreement by executing and
returning at least five counterparts of this Second Collateral Call Extension
Letter to the attention of Xxxxxxxxx Xxxx and Xxxxx Xxxxxxxxx at Xxxxxxx
Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000.
Very truly yours,
NRG ENERGY, INC.
By: /s/ X. Xxxx Xxxxx
------------------------------------------
Name: X. Xxxx Xxxxx
Title: Vice President, Treasurer & CFO
NRG POWER MARKETING INC.
/s/ Xxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman, President & CEO
BRAZOS VALLEY ENERGY LP
By: NRG Brazos Valley GP LLC, as general
partner of Brazos Valley Energy LP
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
BRAZOS VALLEY TECHNOLOGY LP
By: Brazos Valley Energy LP
By: NRG Brazos Valley GP LLC, as general
partner
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
CONEMAUGH POWER LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
GRANITE POWER PARTNERS II, L.P.
By: NRG Granite Acquisition LLC, its general
partner
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
INDIAN RIVER POWER LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
KEYSTONE POWER LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
KILLINGHOLME GENERATION LIMITED
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
KILLINGHOLME POWER LIMITED
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
LSP-XXXXXX ENERGY, LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
LSP-PIKE ENERGY, LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
MIDATLANTIC GENERATION HOLDING
LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG AUDRAIN GENERATING LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG AUDRAIN HOLDING LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG BRAZOS VALLEY GP LP
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG BRAZOS VALLEY GP LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG BRAZOS VALLEY TECHNOLOGY LP LLC
By: Brazos Valley Energy LP, its sole member
By: NRG Brazos Valley GP LLC, its general
partner
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG CAPITAL LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG ENERGY, INC.
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & Chief Operating Officer
NRG FINANCE COMPANY I LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG XXXXXXX LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG MIDATLANTIC GENERATING LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG MIDATLANTIC LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG XXXXXX TURBINES LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NRG TURBINES LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
STERLING LUXEMBOURG (NO. 3) S.A.R.1.
By: NRGenerating Holdings (No. 15) B.V.
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
VIENNA POWER LLC
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Agreed as of the date first above written:
OB BEHALF OF THE LENDERS UNDER THE XXXXX CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Administrative Agent
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Director
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
Agreed as of the date first above written:
ON BEHALF OF THE LENDERS UNDER THE NRG XXXXXXX CREDIT AGREEMENT
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxxx
Title: Associate Director
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
Agreed as of the date first above written:
ON BEHALF OF THE LENDERS UNDER THE NRG MIDATLANTIC LOAN AGREEMENT
XX XXXXXX XXXXX BANK, as Administrative Agent
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
Agreed as of the date first above written:
ON BEHALF OF THE LENDERS UNDER THE BRAZOS VALLEY CREDIT AGREEMENT
ABN AMRO BANK N.V.,
as Agent
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Group Vice President
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Corporate Banking Officer
Agreed as of the date first above written:
ON BEHALF OF THE LENDERS UNDER THE KILLINGHOLME FACILITY
AGREEMENT
BANC OF AMERICA SECURITIES LIMITED,
as Facility Agent
By: /s/ X. X. Onadney
----------------------------------
Name: X. X. Xxxxxxx
Title: Vice President
Agreed as of the date first above written:
ON BEHALF OF THE LENDERS UNDER THE ING ENTRADE FACILITY
AGREEMENT
ING BANK, N.V., organizacni slozka
As Facility Agent
By: /s/ Xxx Xxxxx
----------------------------------
Name: Xxx Xxxxx
Title: General Manager
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Risk Manager
SCHEDULE A
CERTAIN DEFINITIONS
"AFFILIATE" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person; provided that (a) Xcel Energy shall be deemed to be an
Affiliate of NRG Energy and each of its Subsidiaries and (b) a Person shall be
deemed to be an Affiliate of any other Person if it possesses, directly or
indirectly, the power to vote 5% or more of the voting interests of such other
Person or the ability to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
interests, by contract or otherwise.
"BRAZOS VALLEY PROJECT" means that approximately 633 MW
combined cycle electric generating facility currently being developed by NRG
Energy and under construction near Fort Bend County, Texas.
"CAPITAL EXPENDITURE AGREEMENT" means, with respect to any
Person, any agreement relating to any Capital Expenditures to be made by such
Person.
"CAPITAL EXPENDITURES" means, with respect to any Person for
any period, any expenditure in respect of the purchase or other acquisition or
construction or expense of any fixed or capital asset (excluding normal
replacements and maintenance which are properly charged to current operations).
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect obligation of such Person, whether or not contingent, with or without
recourse, with respect to any Debt, lease, dividend, letter of credit or other
obligation (THE "PRIMARY OBLIGATION") of another Person (the "PRIMARY OBLIGER"),
including any obligation of such Person (a) to purchase, repurchase or otherwise
acquire such primary obligation or any security therefor, (b) to advance or
provide funds for the payment or discharge of any primary obligation, or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
primary obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the holder of any
primary obligation against loss in respect thereof.
"DEBT" of any Person means all of the following: (a) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments; (b) all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments; (c) net
obligations of such Person under any Swap Contract; (d) all obligations of such
Person to pay the deferred purchase price of property or services; (e)
indebtedness (excluding prepaid interest thereon) secured by an lien or any
similar encumbrance on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in
Schedule A-1
recourse; (f) any capital leases; and (g) all Contingent Obligations of such
Person with respect to any of the foregoing.
"DEBT INSTRUMENT" means, with respect to any Person, any
agreement, indenture, guaranty or other instrument to which such Person is a
party or issued by such Person in connection with any Debt incurred or to be
incurred by such Person.
"EVENT OF DEFAULT" means, with respect to any Debt Instrument
(including, any Agreement) any event (regardless of how defined in such Debt
Instrument) has occurred and is continuing after giving effect by any grace
period provided for in such Debt Instrument in respect thereto and such event
gives rise to the right of any lender or creditor to accelerate the Debt
outstanding under such Debt Instrument or take any other remedial action in
connection therewith, including, without limitation, the application of any
default interest rate.
"EXEMPTED PROJECT" is a collective reference to each of the
Brazos Valley Project, Meriden Project, Xxxxxx Project (including the turbines
associated therewith) and Pike Project (including the turbines associated
therewith). NRG Energy may designate as an Exempted Project one or more
additional projects that, in its reasonable judgment, do not warrant continued
funding upon (a) the delivery of the Business Plan so long as the addition
thereof as Exempted Projects is consistent with the treatment thereof in the
Business Plan or (b) upon prior written notice with respect to such additional
project being given to the Agents.
"LEASE AGREEMENT" means, with respect to any Person, any lease
agreement in respect of any real property or any personal property which
involves aggregate lease payments payable by such Person in excess of $200,000
(or the currency equivalent thereof) or which is otherwise material to the
business, condition (financial or otherwise), operations, performance or
prospects of such Person.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"MERIDEN PROJECT" means that approximately 540 MW combined
cycle electric generating facility currently being developed by NRG Energy under
construction near Meriden, Connecticut.
"XXXXXX PROJECT" means that approximately 1,168 MW combined
cycle electric generating facility currently being developed by NRG Energy and
under construction near Xxxxxx Township, Illinois and certain costs of which
have been financed under the XxxXx Credit Agreement.
"OTHER MATERIAL AGREEMENT" means, with respect to any Person,
any contract or agreement to which such Person is a party (other than any Debt
Instrument, Capital Expenditure Agreement or Lease Agreement) which involves
aggregate consideration payable to or by such Person in excess of $200,000 (or
the currency equivalent thereof) or which is otherwise material
Schedule A-2
to the business, condition (financial or otherwise), operations, performance or
prospects of such Person.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity.
"PIKE PROJECT" means that approximately 1,168 MW combined
cycle electric generating facility currently being developed by NRG Energy and
under construction near Holmesville, Mississippi and certain costs of which have
been financed under the XxxXx Credit Agreement.
"PROJECT SUBSIDIARY" means any Subsidiary which (a) has Debt
which is not fully recourse to NRG Energy or any other of its Subsidiaries, (b)
in a group of Subsidiaries which together have Debt which is not fully recourse
to NRG Energy or any other of its Subsidiaries or (c) is the owner of, or has
lent funds for the development and construction of, directly or indirectly, any
Exempted Project, including, without limitation, the Pike Project and the Xxxxxx
Project.
"PUBLIC UTILITY HOLDING COMPANY ACT" means the Public Utility
Holding Company Act of 1935, as amended and any and all regulations and rules
promulgated thereunder.
"REQUIRED PERCENTAGE" means, with respect to any waiver or
amendment of any provision of any Agreement, the percentage of Lenders party to
such Agreement (or the related Primary Agreement) required to approve the
relevant amendment or waiver contemplated or, in the case of any waiver or
amendment of any provision of this Second Collateral Call Extension Letter or
the Xcel Letter, the percentage of Lenders party to each Primary Agreement
required to approve the Collateral Call Waiver.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, joint venture, limited liability company, trust or
estate of which (or in which) (a) 50% or more of (i) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital stock
of any other class or classes of such corporation shall or might have voting
power upon the occurrence of a contingency), (ii) the interest in the capital or
profits of such partnership, joint venture or limited liability company or (iii)
the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person and one of more of its
Subsidiaries or by one or more of such Person's other Subsidiaries, in each
case, now or hereafter existing or (b) such Person directly or indirectly,
whether through contract or otherwise, exercises control.
"SWAP CONTRACT" means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, power and fuel
marketing and sales and purchase agreements, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot
Schedule A-3
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"MASTER AGREEMENT"), including any such obligations or liabilities under any
Master Agreement.
"WAIVER TERMINATION DATE" means the earlier to occur of (a)
November 15, 2002 and (b) the date on which the Second Collateral Call Extension
Letter terminates in accordance with paragraph 6 thereof.
Schedule A-4
EXHIBIT A
[INSERT FORM OF XCEL ACKNOWLEDGMENT]
Exhibit A-1
EXHIBIT B
[INSERT FORM OF XCEL LETTER]
SCHEDULE 1
NRG ENERGY, INC.
MINIMUM CASH BALANCE COVENANT
(AMOUNTS IN THOUSANDS)
BASE FOR MINIMUM CASH
WEEK BALANCE
-------------- ---------------------
Sept 30- Oct 4 131,212
Oct 7-11 116,378
Oct 14-18 107,951
Oct 21-25 103,607
Oct 28 - Nov 1 95,222
Nov 4-8 90,121
Nov 11-15 84,990
Nov 18-22 82,002
Nov 25-29 76,660
